Taking Part in the German Battery Boom
Roughly one half of the more than 20 electric vehicle battery gigafactories currently being constructed in Europe are in Germany. Germany Trade & Invest (GTAI) helped a number of these battery makers set up shop in Europe’s biggest market. China’s SVOLT, for instance, will commence construction on its new facilities in the southern German region of Saarland later this year. We spoke with GTAI automotive expert Stefan Di Bitonto and SVOLT Vice-President for Energy Technology (Europe) Maxim Hantsch-Kramskoj about why it makes sense to set up shop here.
Why are international companies in this sector so eager to come to Germany?
Stefan Di Bitonto: First of all it’s a very capital-intensive business we’re talking about here, which makes it quite complicated when it comes to the transportation of these goods. You’re binding a lot of capital for a long time on a ship, and these are hazardous goods, which makes it quite complicated to transport them. We’re talking about hazardous goods, which makes transportation costs even more expensive. So if you’re really looking into doing business with the automotive industry in Europe, then you’re thinking about Germany, because it’s the heartland of the automotive industry. So you want to be really close to the OEMs that are demanding these batteries at the end of the day.
What about the workforce in Germany?
Di Bitonto: We have a very highly skilled labor force here. We will see people being let go from the traditional industry, which will have access to new energy sources and new energy jobs. Therefore, we have lots of people who are willing to take such highly skilled jobs in the battery industry.
What role does Germany’s transition to clean energy play?
Di Bitonto: These battery makers need 100% renewable energies directly in order to produce their batteries with a very low CO2 footprint, which is very important. Very many other European countries and countries around the world don’t have that privilege. In Germany, we do have the privilege of having direct access to renewable energies.
In late 2021, Chinese battery maker SVOLT will begin construction of a two-billion-euro, 24GWh state-of-the-art production facility, SVOLT’s first European location, in the Saarland region. Why southwestern Germany?
Maxim Hantsch-Kramskoj: Saarland is an industrial location in the heart of Europe that has grown over decades. Today it combines strong focus and expertise in the steel and automotive industries with globally recognized excellence in IT and cybersecurity. The fact that SVOLT has chosen to come to Saarland shows the future viability of the economic location. At the same time it provides the region for fast industrial transformation from steel into the high-performance lithium-ion battery market needed to establish zero-emission mobility.
How can other automotive companies profit from the trend toward batteries made in Germany?
Di Bitonto: I think a good way would be if these suppliers who are already working for battery makers globally see this as an opportunity to come to Europe where renewable energies and the Green Deal are actually being taken seriously and expand into Europe – in the best case Germany, where a lot of battery companies are at this point.